Ireland warned over EU directive on money

IRELAND IS among 15 EU member states that have been warned by the European Commission to implement new money-laundering legislation or face legal action, writes Killian Doyle.

EU internal market commissioner Charlie McCreevy wrote to the governments of 15 of the 27 member states telling them to impose the EU's Third Money Laundering Directive.

"The fight against money-laundering and terrorist financing is a priority for both the commission and the member states," Mr McCreevy said in his letter.

"In these circumstances, the commission has no other option but to proceed with legal actions . . . against those member states which have not implemented the directive, and to do so in as expeditious a manner as possible," said the former minister for finance.

The countries facing possible sanctions are Ireland, Austria, Belgium, the Czech Republic, Germany, France, Greece, Latvia, Luxembourg, Malta, the Netherlands, Poland, Slovakia, Sweden and Spain.

Any legal action would involve a three-stage process ending up in the European Court of Justice, which has powers to fine countries for not enforcing EU law.

The EU's revised anti-money-laundering directive is intended to help cut funding to terrorists and to tackle money-laundering by criminal gangs. It imposes new curbs on the movement of money not only in the traditional financial sector, but also through a number of non-financial market activities such as casinos and art-dealing.

In addition, it extends the obligation to report suspicious activities from banks and financial institutions to lawyers, accountants and other providers of services for companies and trusts. The rules cover anyone dealing in goods and services for cash payments of more than €15,000.

Banks have complained they are finding it difficult to apply the new rules as not all EU member states had formally adopted them into law by the December 15th, 2007, deadline.

Last February, the Government approved proposals by former minister for justice Brian Lenihan for the introduction of the Criminal Justice (Money Laundering) Bill which would allow the EU directive to be transposed into Irish law.

A Department of Justice spokeswoman told The Irish Times yesterday it was expected that the Bill would be published "later in 2008".- (Reuters)